Recently I have seen more and more advertising for "pump groups". Pump groups promise members "easy money". In reality these groups are a scam and the only ones that benefits are the group leaders.
How a Pump Group works
- The group spams public message boards/steemit etc. to get members to join their telegram app.
- Leaders of the group decide on a coin that will be "pumped". They buy into this coin day/weeks/months in advance to buy it as cheap as possible.
- Group leader announces that a pump will happen on exchange XYZ at time/date. Members still have no idea what coin will be pumped.
- Leaders of the group place a bunch of sell orders well above the current buy price of the coin in preparation of the pump.
- Group leader announces the coin and members go in a buy frenzy. In reality all that is happening is the members are buying the leaders overpriced coin. It's a game of musical chairs and the last one to place a sell order is stuck with bunch of coins they overpaid for. The entire "pump" lasts less then a minute and the only people that make significant monetary gains are the group leaders.
Summary
Members of the group pump the coin while the leaders dump it. Stay away.
I seen them also, and sometimes these guys take horrible losses, to manipulate markets like that can have horrible consequences.
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@cryptoindex
Good content
Keep sharing good posts!
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